Consider a stock market with three stocks available, A, B, and C. The number of shares outstanding remains constant for each stock over time. The table below summarizes the information on the number of shares outstanding and the ending stock price of each stock on two consecutive days:

	A	B	C
Number of shares (in millions)	1	4	2
Ending Price (Day 1)	8	15	10
Ending Price (Day 2)	10	13	10

1. Construct a price weighted index on Day 1 and Day 2, and calculate the return on the index from Day 1 to Day 2. (6 points)

2. Suppose you are an index fund manager and you want to track the price-weighted index using $6,600,000. Please form a tracking portfolio of the index (list the composition of your portfolio) and calculate the portfolio value at the end of Day 2. (8 points)

3. Suppose stock C has a 2-for-1 stock split after the market closes on Day 1. Nothing else happens to stock C on Day 2. What is the new price of stock C at the end of Day 2? What is the new value of the price weighted index on Day 2 and how do you adjust the divisor to get it? (8 points)

4. Please provide a real example of a price weighted stock index. (3 points)